Author: Greg Winterton

The impact of interest rate changes on the life settlement market is not as clear cut as in other private asset classes.

Traditional wealth management practices for retirees haven’t always deeply integrated longevity risk – the risk of outliving one’s assets – into their investment strategies for their clients. Indeed, historically, the approach has been somewhat formulaic, often based on generalised assumptions about life expectancy, risk tolerance and the expected returns of different asset classes.  But for many wealth managers, the reality of their clients living longer is forcing them into something of a rethink; a rethink that ties directly into the expertise of the life settlement industry.  Life settlement asset managers and providers have access to a wealth of life expectancy…

September sees the start of autumn – unofficially – and more of the year has passed than remains. So, as the home stretch of 2024 begins, Greg Winterton caught up with Rainer Gruenig, CEO at Plenum Investments, to get his thoughts on how the life settlement market has fared generally so far this year.  GW: Rainer, to begin, give us your thoughts on the year so far for life settlements.  RG: I think it’s been a challenging year. All of the firms in our market have felt the impact of higher for longer interest rates in the past couple of…

Retirement planning in the US typically involves discussions around investments such as stocks and bonds, and, for the more affluent, offerings such as hedge funds, private equity, and real estate.   But for many Americans, their life insurance policy is their second largest asset, after their home. And many of these life insurance policies meet the criteria for sale in the life settlement market.  So, why aren’t more American seniors taking advantage of this option as part of a more holistic retirement planning solution? Greg Winterton spoke to Rob Haynie, Managing Director at Life Insurance Settlements, Bryan Nicholson, Executive Director at…

Equity Release mortgage securitisations carry a range of benefits for institutional investors when compared to standard residential mortgage-backed securities (RMBS).   Reverse mortgage securitisations involve deferred payment of interest and principal along with low loan-to-value security risk, often offering higher risk-adjusted yields compared to standard RMBS. Since reverse mortgages are typically not repaid until the borrower sells the home, moves out permanently, or passes away, the risk of early repayment (which can affect returns in RMBS) is generally lower, making cash flow more predictable. Another is that reverse mortgages usually have longer durations because they are not amortising monthly like typical…

The landscape of licensed life settlement providers is largely unchanged this year, according to new data published by the European Life Settlement Association (publisher of Life Risk News).  The organisation is out with an update to its Licensed Provider Matrix (LPM), which it originally published as part of a ‘fact sheet’ in December last year. The LPM lists the licensed life settlement providers active in the industry, and the states in which they are licensed to operate.  In 2024, there is a net reduction of the total number of licenses of seven, a statistically insignificant 0.85% contraction from the 707…

Summer tends to be quieter for many parts of the alternative investment industry as people take their foot off the gas a little bit to enjoy the nicer weather and head out on holiday. But this year, two categories within the broader longevity and mortality risk markets did not get the memo. The life settlement and insurance-linked securities markets saw four deals announced publicly in July – three M&A deals and one management buyout.  Whilst alternative asset classes such as private equity, real estate and private debt see four deals announced most days, for these industries, this was something of a busy month. In…

Activity in the smaller scheme corner of the UK’s pension risk transfer market has held up in the past 18 months, despite initial concerns of crowding out. Greg Winterton spoke to Adam Davis, Managing Director at K3 Advisory, to get his thoughts on the drivers of activity in this part of the country’s booming bulk purchase annuity space.  GW: Adam, first off, what is the main reason – or reasons – that activity in the smaller scheme space has held up well recently?  AD: It is important to remember that, in terms of large schemes, there are not that many…

It is now a year since UK regulator the Financial Conduct Authority (FCA) brought in its new Consumer Duty (Duty), a regulation requiring all financial services firms to ‘act to deliver good outcomes for retail customers’ for all new product offerings. This month, the FCA closes the loop with the implementation of the duty for closed product offerings.  One of the markets that is impacted by the Duty is the country’s equity release market (ERM). Participants ranging from independent financial advisors right through to the funders themselves (life insurers and pension funds, in the main) have had to get with…

Life settlement asset managers pay significant sums of money to keep a life insurance policy in force until the insured dies. These sums can, and very often do, stretch to millions of dollars from when they assume ownership of a policy to when it matures.  But what happens if a policy they own is declared void ab initio because of a lack of insurable interest?  Under Delaware law in the US, when the present owner acquires an insurance policy, they typically also acquire all right, title, and interest in the policy – including the right to recovery of prior premiums…